Broker: CGS International
Date of Report: January 28, 2026
Excerpt from CGS International report.
Report Summary
- OUE REIT delivered a strong FY25, with a Distribution Per Unit (DPU) of 2.23 Singapore cents, exceeding expectations due to a hospitality rebound, finance cost savings, and one-offs.
- Management is focused on growth for FY26, including potential acquisition opportunities such as a stake in Sydney’s Salesforce Tower, and ongoing asset enhancement and recycling strategies.
- OUE REIT maintains a healthy balance sheet with aggregate leverage at 38.5% and over S\$300m debt headroom, supporting further acquisitions and value creation initiatives.
- Commercial segment performance remains resilient, marked by positive rental reversions (+9.1% for Singapore offices), stable occupancy, and robust retail strategies at Mandarin Gallery.
- Outlook for hospitality assets is improving, with management guiding for growth at Hilton Orchard and stabilisation at Crowne Plaza.
- Target price has been raised to S\$0.41, with “Add” recommendation reaffirmed, supported by a positive rental and hospitality outlook, and accretive acquisition potential.
- OUE REIT scores well on environmental ESG metrics, with ongoing targets for emissions and resource efficiency, though governance ratings remain an area for improvement.
- Key risks include higher-than-expected interest costs and potential downtime from non-renewal of major leases.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgs-cimb.com
